AP sources: Obama team to form agenda group

FILE - In this Jan. 14, 2013 file photo, President Barack Obama speaks during the last news conference of his first term in the East Room of the White House in Washington. Obama's political organization is forming an outside, nonprofit group to support the president's legislative agenda. The unprecedented move gives Obama a way to promote his agenda outside the confines of the White House and seeks to harness the energy from his re-election campaign into support for legislation. (AP Photo/Carolyn Kaster, File)
— AP

FILE - In this Jan. 14, 2013 file photo, President Barack Obama speaks during the last news conference of his first term in the East Room of the White House in Washington. Obama's political organization is forming an outside, nonprofit group to support the president's legislative agenda. The unprecedented move gives Obama a way to promote his agenda outside the confines of the White House and seeks to harness the energy from his re-election campaign into support for legislation. (AP Photo/Carolyn Kaster, File)
/ AP

The grass-roots mobilizing and fundraising operation was dubbed Organizing for America, and it sought to marshal support for Obama's health care overhaul during the first term. But it struggled to have much impact on the divisive debate and essentially became a campaign-in-waiting for Obama ahead of his re-election race.

When Obama launched his 2012 campaign, he had a full-scale political operation at the ready. It raised more than $1 billion and used high-tech tools to identify supporters and turn them out in droves. He also used it to mobilize grassroots supporters behind efforts to extend the payroll tax cut, federal student aid benefits and recent efforts to raise taxes on the wealthy.

Since Obama's re-election, one question in Democratic circles has been whether Obama would turn over his operation to the DNC to build the party for the future - or whether he would use it to protect his legacy.

After surveying its members, Obama's re-election campaign team considered housing the organization within the DNC but decided to become a nonprofit because it was the best way for campaign volunteers to stay together as a group and advocate for issues they care about.

Yet the decision to be separate from the DNC could rile some Democrats who have grumbled that the president was more interested in protecting his own "brand," in political speak, than in building the party.

The group will be a 501 (c) (4) under the federal tax code, which grants tax-exempt status as long as organizations are not primarily involved in activity that could influence an election. As a nonprofit, it could run ads advocating support for an issue but could not be involved in political activity aimed at electing Democratic candidates.

Campaign finance experts said the creation of a nonprofit group with close ties to the president could raise questions on how donations from corporations might influence federal policy. Craig Holman, who lobbies on ethics and campaign finance for the watchdog group Public Citizen, said if the group receives corporate and special interest money, it could "pose some very serious problems."

The decision by the group to accept corporate donations also reflects Obama's shifting stance on campaign finance. He criticized pay-for-access activities during his first campaign and was a vocal opponent of "super" political action committees, which can raise and spend unlimited funds to help candidates. Obama later signed off on Democrats creating super PACs when he faced tens of millions in spending by allies of his Republican campaign challengers.